Stocks

[chanti149]

Jupiter wagons...200 to 300 in 10days with upper circuits in flat to red  market....hmmmm

[chanti149]

Titagarh ran and then texrail and jupiter now....

Similarly...mazdock ran..and now grse catchup kumming...

Hmmm

Solar industries crossed 3700-3800 level after gud consolidation and now lukng strong ...now at 4300 around

[Jaitra]

2 hours ago, Jaitra said:

290 lo chance ichindhi...now broke above 300....don't think it will come back now

Uc

[namontrnbk]

23 hours ago, Jaitra said:

As long as it hits Uc no chance to enter

Lets see if tomorrow if it gives us a chance to enter.

Thank you bro...

 

[namontrnbk]

10 hours ago, Jaitra said:

CIRCUIT opened....but ekkuva time undaka povachu....see and enter....sky gold....enter at your own risk

Yeah... I've seen that... But I was afraid to enter.. so I left the chance..

[namontrnbk]

10 hours ago, Jaitra said:

290 lo chance ichindhi...now broke above 300....don't think it will come back now

If it gives another opening tomorrow.. what's your view bro? Would it be best bet to enter.. of course risk is all mine... But I don't really know about this stock.. so need some opinions..

[namontrnbk]

Irfc,utkarsh,iob high volume stocks crashed today... they fell below their recent support levels... What could be the reasons? Can we expect consecutive crash tomorrow? 

[Jaitra]

9 minutes ago, namontrnbk said:

Irfc,utkarsh,iob high volume stocks crashed today... they fell below their recent support levels... What could be the reasons? Can we expect consecutive crash tomorrow? 

Shakeout emo

[Jaitra]

17 minutes ago, namontrnbk said:

If it gives another opening tomorrow.. what's your view bro? Would it be best bet to enter.. of course risk is all mine... But I don't really know about this stock.. so need some opinions..

270 to 280 will be good entry 

But no guarantees it will come there

[namontrnbk]

1 hour ago, Jaitra said:

Shakeout emo

Pedda milk shake ayindhi naaku🤣

[namontrnbk]

1 hour ago, Jaitra said:

270 to 280 will be good entry 

But no guarantees it will come there

Right now it's 300... Can we enter if there's a circuit opening again tomorrow 

[Jaitra]

10 hours ago, namontrnbk said:

Right now it's 300... Can we enter if there's a circuit opening again tomorrow 

if u are planning to hold till Diwali....then definitely...day low lo catch it

[NBK NTR]

14 hours ago, namontrnbk said:

Yeah... I've seen that... But I was afraid to enter.. so I left the chance..

enter ayyara bro..stock is in ESM stage 1

[Jaitra]

6 minutes ago, NBK NTR said:

enter ayyara bro..stock is in ESM stage 1

chaala stocks untai BE list lo....after few months they come out of that list.

[roger7]

even avantel is in that list of ESM..

[roger7]

14 hours ago, namontrnbk said:

Irfc,utkarsh,iob high volume stocks crashed today... they fell below their recent support levels... What could be the reasons? Can we expect consecutive crash tomorrow? 

Utkarsh- profits are not good for Q1 FY24, but NPA portion is in control they have very good line-up of products by 2025-2026 it will cross... 400range..

concall happened on 9th august 2023 -for utkarsh

 

in long run it will be a fight between Ujjivan Small Finance Bank  VS Utkarsh  Bank

Edited August 18, 2023 by roger7

[roger7]

3 minutes ago, roger7 said:

Utkarsh- profits are not good for Q1 FY24, but NPA portion is in control they have very good line-up of products by 2025-2026 it will cross... 400range..

concall happened on 9th august 2023 

my gut feeling says in long run - both Uttkarsh and Ujjivan will turn out to be the multibaggers for their investors..purchasing these stocks in SIP mode will be very good over a decade- wherein first four years investment and balance reaping the benefits.. out of these stock.. 

Bank nifty will go beyond 90k in next five to seven years with an annual yield of 1.90% to that day.. 

[NBK NTR]

8 minutes ago, roger7 said:

in long run it will be a fight between Ujjivan Small Finance Bank  VS Utkarsh  Bank

Ujjivan SFB gonna be merged with Ujjivan Financial by end of this quarter bro...Shareholders of Ujjivan SFB will get Ujjivan Financial shares.

[namontrnbk]

1 hour ago, Jaitra said:

if u are planning to hold till Diwali....then definitely...day low lo catch it

Ok bro.. I'll check

[namontrnbk]

43 minutes ago, NBK NTR said:

enter ayyara bro..stock is in ESM stage 1

Not yet bro.... Heavily anthar madhanam..

[namontrnbk]

14 minutes ago, roger7 said:

my gut feeling says in long run - both Uttkarsh and Ujjivan will turn out to be the multibaggers for their investors..purchasing these stocks in SIP mode will be very good over a decade- wherein first four years investment and balance reaping the benefits.. out of these stock.. 

Bank nifty will go beyond 90k in next five to seven years with an annual yield of 1.90% to that day.. 

Asalenti aa infos enti... With no.s.. Ela?

[namontrnbk]

11 minutes ago, NBK NTR said:

Ujjivan SFB gonna be merged with Ujjivan Financial by end of this quarter bro...Shareholders of Ujjivan SFB will get Ujjivan Financial shares.

Bro... But ujjivqn financial share I'd almost 10 times higher than ujjivan small finance.. will they allot that way? Then that would be a hell of gain..

Where did you get the info bro?

[roger7]

12 minutes ago, NBK NTR said:

Ujjivan SFB gonna be merged with Ujjivan Financial by end of this quarter bro...Shareholders of Ujjivan SFB will get Ujjivan Financial shares.

yeah i know.. it will make the system of ujjivan very robust but still the product line of ujjivan will keep fighting with utkarsh.. 

when i spoke to CA friend he said ujjivan can still be valued on the lines with utkarsh as far as its original valuation is concerned..so it looked new to me also.. 

[roger7]

Just now, namontrnbk said:

Bro... But ujjivqn financial share I'd almost 10 times higher than ujjivan small finance.. will they allot that way? Then that would be a hell of gain..

Where did you get the info bro?

it came in news but in earnings call it was not metioned specifically.. 

[roger7]

Moderator:                         Ladies and gentlemen, good day and welcome to Ujjivan Small Finance Bank Limited Q1 FY24 Earnings Conference Call hosted by IIFL Securities Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded.

 

I now hand the conference over to Mr. Rikin Shah from IIFL Securities Limited. Thank you and over to you, sir.

 

Rikin Shah:                        Thank you, Salil. Good evening, everyone, and thanks for joining the call. We have with us the management team of Ujjivan Small Finance Bank to discuss the business strategy and Outlook Post, the Q1 results. The management team is represented by Mr. Ittira Davis, MD and CEO, Ms. Carol Furtado, Chief Business Officer, Mr. Martin P S, Chief Operating Officer, Mr. Ashish Goel, Chief Credit Officer, Mr. M.D. Ramesh Murthy, Chief Financial Officer, Mr. Vibhas Chandra, Head of Microbanking and Mr. Deepak Khetan, Head of Financial Planning and Strategy, IR.

 

With this, I will pass on the call to Mr. Ittira Davis. Over to you, sir.

[roger7]

Ittira Davis:                        Thank you, Mr. Shah. Good evening and welcome to our first quarter earnings call. I am delighted to share with you our first quarter performance. Despite Q1 generally being a slow quarter, our performance has been robust, building on the strong base of financial year ‘23. Our Pre-Provision Operating Profit and PAT have reached new highs of INR458 crores and INR324 crores respectively, which is 52% and 60% higher than Q1 of the last year respectively. Even against Q4 FY ‘23 it is 12% and 5% higher respectively.

 

Our return on assets at 3.8% is again something that puts us ahead of our peers and that has been the trend for the last few quarters. Some of it is due to lower credit costs, but even our PPOP ROA at 5.4% is quite remarkable. We posted a return on equity of 30%, which also means that the business is self-funding itself, leading to an improvement in CRAR from 25.8% to 26.7%.

 

Now starting with the business numbers, we dispersed INR5,284 crores up 22% year-on-year, while the demand continues to be there, disbursement for microbanking was sequentially low due to Q1 being historically a weak quarter. We expect the disbursement to pick up again by the second half of the fiscal year. We acquired about 2.6 lakh new customers this quarter in microbanking. As our new branches move towards maturity, we will see more traction in micro-banking especially in the new customer acquisition.

 

Among the secured products, affordable housing which is now more than INR3650 crores, continue to show strong disbursements, with INR418 crores in the first quarter as against INR288 crores in the first quarter of the last year. The business is slowly moving to a hub an spoke model to improve operating efficiency. We have already opened four hubs in Ahmedabad, Coimbatore, Mysore and Jaipur. More will be commissioned over the next few quarters. As these hubs gain business momentum, it will further progress forward.

[roger7]

Moderator:                         I'm really sorry to interrupt. Well, sir, there is a lot of disturbance from your end right now, due to which you are not audible. If you could just readjust the microphone where it is placed, that would be great.

 

Ittira Davis:                        Yes, I'll just go through the business numbers again in dispersed INR5,284 crores, up 22% year on year. While the demand continues to be there, disbursement for micro-banking was sequentially low due to Q1 being a historically weak quarter. We expect the disbursements to pick up again by the second half of the fiscal year. We acquired 2.6 lakh new customers this quarter in micro banking.

 

Our new branches move towards maturity. We will see more traction in micro banking business, especially in new customer acquisition. Amongst these new products, affordable housing is now more than INR3,650 crores. We continue to show strong disbursements with INR418 crores in the first quarter against just INR288 crores in the first quarter of the previous year, that is FY ‘23.

 

Business is slowly moving to a hub-and-spoke model to improve operating efficiency. We have already opened four hubs, one in Ahmedabad, the other in Coimbatore , the other in Mysore and Jaipur. More will be commissioned over the next few quarters. As these hubs gain business momentum, it will further propel our growth.

 

The FIG dispersed INR 320 crores, up 113% year on year. MSME continues to be in transition. We have a few more technology related changes to be introduced before we ramp up the business. This will be much like what we went through during the housing transformation. So once that is ready, we are ready to launch. So we also launched the semi- formal lap product in Q1 and more products are in the pipeline. The business should start to develop towards the end of this fiscal year.

 

Vehicle finance and gold loans should also start to contribute in the second half of the year. Our grass loan book now crossed INR25,000 crores and as on June 30th was INR25,326 crores, up 30% year on year and 5% quarter-on-quarter. Talking about liabilities, our deposit grew 45% year-on-year and 4% quarter-on-quarter to INR26,660 crores.

 

We continue to see movement of current deposits towards term deposits this quarter, which is in line with the industry trend. Our retail term deposits grew 71% year-on-year to INR10,970 crores, while CASA grew 27% year-on-year to INR6,556 crores. Our cost of funds has continued to rise this quarter in line with the industry.

 

Despite pressure from cost of funds side, we were able to expand our NIMs this quarter. This was a result of consciously reducing excess liquidity which was driving a negative carry and pulling down NIMs and benefiting from the yield expansion of an effect of book repricing which we took last year. Last year we took, they had two repricings on the microfinance book, one in September and the other in March this year. All of those...

 

[roger7]

Moderator:                         Sorry to interrupt you, Apologies. Sir, there is a lot of disturbance from your line. Just let me quickly get you reconnected. Ladies and gentlemen, the management line is now connected.

 

 

Ittira Davis:                        I'll just go back a few sentences to our gross loan book. Gross Loan Book has now crossed INR25,000 crores and on June 30th it was INR25,326 crores, which is a growth of 30% year- on-year and 5% quarter-on-quarter. Talking about our liabilities, our deposit grew 45% year- on-year and 4% quarter-on-quarter to INR26,660 crores. We continue to see some movement of CASA deposits towards term deposits this quarter, which is in line with the industry trend.

 

Our retail term deposits grew 71% year-on-year to INR10,970 crores, while CASA grew 71% year-on-year to INR10,970 crores, while CASA grew 27% year-on-year to INR6,556 crores. Our cost of funds has continued to rise this quarter in line with the industry. Despite pressure from the cost of funds side, we were able to expand our NIMs this quarter. fund side, we were able to expand our NIMS this quarter.

 

This was a result of consciously reducing the excess liquidity which was driving negative carry and pulling down our NIMS and benefiting also from the yield expansion as an effect of our book repricing post the hike we took last year. Last year we took two hikes on the microfinance front, one in September and one in March this year. The full effect of that is being felt in this quarter and beyond. So our net interest income was up 32% year-on-year and 7% quarter-on-quarter, driven by gross loan book growth and yield expansion.

 

Coming to credit and collections, our asset quality remains sturdy with a GNPA of 2.4% versus 2.6% sequentially, while our NNPA continues to remain negligible at 0.06%. Slippages remain under control, with Q1 slippages at INR103 crores and upgrade and recoveries at INR77 crores. Restructured book now is at INR182 crores, with June ‘23 collection efficiency at 102%. While the NPA collection has started to move down towards normalization, bad debt recovery remained strong this quarter. We recovered INR35 crores. As we have already mentioned, our bad debt recoveries should be significant even in financial year ‘24, although it would be lower than what we recovered in financial year ‘23.

 

During the quarter, our branch expansion continued with 32 new branches added. 14 of these were in the east, 8 in the north, 6 in the south and 4 in the west. This quarter, and that takes a total to 661 as of the 30th of June. We will now be adding 70-odd branches for the rest of this year. We are in the final stages of testing our digital fixed deposit offering, which will provide seamless experience to our customers and help us to serve beyond brick-and-mortar.

 

Now an update on the merger with our promoter, Ujjivan Financial Services. The hearing of our application with the NCLT was completed on June 28, and we expect to receive the order soon and telling directions for scheduling the meetings of stakeholders and other directions as the NCLT may be in fit. On my succession plan, as I've been mentioning, the Board is working on identifying the right candidates. The Board is committed to identify the potential candidates with strong business orientation and a connect with the ground and dedication towards building a mass market bank. Both internal and external candidates are being considered. And much before the due date, the transition will be completed.

 

As many of you would have noticed, we have launched our nationwide brand campaign a few days ago, earlier this week. This campaign is a prominent step towards establishing Ujjivan as

 

 

a mass market bank. Previously, we had not invested much on ATL brand campaigns, but moving ahead, we will continue to invest in brand building. This will provide our branches more awareness and help us build trust across our customer base. This in return will push our retail liabilities further.

 

To conclude, I would add that business momentum remains strong, reassuring our confidence towards the guidance that we shared at the beginning of this financial year. Thank you.

[roger7]

Moderator:                         Thank you. We will now begin the question-and-answer session. The first question comes on the line of Nidhesh from Investec. Please go ahead.

 

Nidhesh:                             Thanks for the opportunity sir. Two, three questions. Firstly, in the MSME segment we have seen some deterioration in asset quality and growth slowing down. We are reorienting that business. Can you speak about the strategy in which segment we will be operating in, what will be the targeted yields and profitability in that MSE book going forward?

 

Ashish Goel:                       Could you please repeat that question?

 

Nidhesh:                             So I'm asking about the strategy in the MSE book, given that we have seen growth slowing down, where we have been cautious and we are reorienting that business. So what is the strategy going forward? What segment, customer segment, yields, ticket size, we will be focusing on?

 

Carol Furtado:                   Hi, this is Carol Furtado. As we have been talking about the transition that has been taking place in our MSME segment, we have been talking about our customers under various categories. One is a semi-formal LAP, the other one is a formal LAP. We are also getting into the working capital facilities, supply chain, and digital MSME lending.

 

Semi-formal LAP, the target is semi-formal micro and small enterprises who are transitioning from the unorganized and the informal business models to the organized and formal business setup. Here, the offering would range from INR15 lakhs to INR1.5 crores, and the tenure or up to 12 years. We have already launched this product since May, and this product seems to be on a growth path.

 

The formal lab is where we would be focusing on formal, micro, and small and medium enterprises who are operational as an organized formal business setup. Here we are proposing to offer a loan size of around INR25 lakhs to around INR5 crores with a tenure up to 15 years. This would be set up in select locations to grow the lap portfolio.

 

The third line would be the working capital facilities, again, where the target is formal, micro, small and medium enterprises. This is to fulfill their business banking needs. And we would be offering a variety of products here, fund-based and non-fund-based facilities. Here again, the ticket size would be around INR15 lakhs to around INR10 crores.

 

Supply chain is again there, which is being worked on to meet the cash flow-based short-term funding requirements of our customers. And we also would be having digital MSME lending,

 

 

which we will grow through our FinTech partnerships. You know, yes, we have been operational since May in the semi-formal lab segment. And we are investing heavily to build infrastructure and internal capabilities to strongly address the other four business lines in the MSME vertical.

 

And that is the reason why the transition is taking some time to operationalize. And we have made significant process in designing the strategy and we will be showing the progressive outcomes in the coming quarters. And the full extent of the investment would be visible in the span of the next two, three financial years.

 

Nidhesh:                             Sure. And is it reasonable to expect that the yields in this portfolio will be less than sub 12% given that we are largely operating in formal segment and higher ticket size?

 

Carol Furtado:                   Yes, the blended rate would be around 12%, 13%.

 

Nidhesh:                             Sure, and data keeping question on the customer acquisition in the microfinance group and individual loan side. What is the count of customers that we have acquired in this quarter? And what is the active customer base on both microfinance group and individual as of June ’23?

 

Vibhas Chandra:                Yes, hello, as far as you know, customer acquisition is concerned, we have acquired 2.6 lakh new customers this quarter. And what was your second question?

 

Nidhesh:                             I wanted the break up in group and individual, if that is possible? Vibhas Chandra:               Okay. For the quarter or the entire micro banking customer base? Nidhesh:          As of June 23, what is the active customer base in micro finance group?

Vibhas Chandra:                In micro banking we have 40 lakh borrower base. Out of 40 lakh, 36.5 lakh customers are Group Loans and 3.5 lakh customers are Individual Loans.

 

Nidhesh:                             Sure. Thank you so much, sir. Thank you.

 

Management:                      Thank you very much.

 

Moderator:                         Thank you. The next question comes on the line of Shailesh Kanani from Centrum Broking.

Please go ahead.

 

Shailesh Kanani:                Congratulations, sir, on excellent performance during the quarter and thanks for the opportunity. Sir, my first question is with respect to our individual lending book. We are seeing very good traction on that front. Can you share some qualitative aspect with respect to the book and the customer profile, given that it's a high ticket size loan. What traction we are seeing and what kind of customer we are seeing out there?

 

Vibhas Chandra:                Yes, Agri loan is something which is a old business in Ujjivan. We started this business in 2008, long back, as we realized, there is a huge potential of customers upgradation from GL to IL. Our current average ticket size is close to 1.3 lakhs in IL, where the customer graduates

 

 

after 2-3 cycles. And we see a huge potential here because a large number of customers actually try to graduate after 2-3 cycles. And there is a gap.

 

There are microfinance players and then there are other players also, who are into formal financing. But these customers don't get financed from anybody. We have started this, we have close to 3.5 lakh customers at this point of time, and we want to grow this business as we see huge potential going forward. Largely, customers are divided into three categories.

 

We have business loans, we also have agri- and allied business in IL, and a good amount of customers also take home improvement loans. These are the basic three categories of loans that we offer.

 

Shailesh Kanani:                Okay, that is good. So, second question is with respect to yields on affordable housing segment, they seem to be little on the lower side. So can you just highlight about that and if there is any scope of improvement in that segment?

 

Deepak Khetan:                  Yes, the yield for the affordable housing segment is around 13%, which is excluding the MLAP business and it has been in this line only around 12.9%, 13% odd. And I do not understand what you mean that, it is on the lower side.

 

Shailesh Kanani:                Just considering that it would be semi-informal segment, I was assuming that the yields might improve on that front. Just wanted to know your view on that?

 

Deepak Khetan:                  As we move more towards the Tier 2 and 3 towns and beyond that, yes, there would be a little improvement that might happen. Our yield on disbursement is around 13.2%. So for salaried, the yield is around 11% to 12% and for semi-informal, self-employed and all is around 14%.

 

[roger7]

 

Shailesh Kanani:                Okay. That's all from my side. Thanks a lot.

 

Deepak Khetan:                  Thank you, Shailesh.

 

Moderator:                         Thank you. The next question comes from the line of Manish Ostwal from Nirmal Bang Securities Pvt. Ltd. Please go ahead.

 

Manish Ostwal:                  Yes sir. I have a question on your comments in the press release, where you mentioned that, we remain confident of our sub-100 basis point credit cost for FY ‘24. given your collection trends in the business and so this guidance need to, don't you think you need to revise downward or still you think there is a risk which may play out?

 

Ashish Goel:                       So thank you. This is Ashish. So in the first quarter, we have actually had much lower than the low credit cost. You could say about 10 bps on the overall book. We have given a guidance of about 1%, but our book is maturing and will be maturing. We will continue to mature during the course of the year. So there could be slightly higher credit cost in the third and fourth quarter, which we are factoring in, when we give a guidance of about 1% but we've always maintained that it will be lower than 1%. So that is, we maintain that. We will continue to see a lower credit cost during this quarter, quarter on quarter this year and it should sum up to less than 1% for the year.

 

 

Manish Ostwal:                  Yes, and secondly in our one of the slide, where you have mentioned the collection efficiency in segment wise, so I was seeing MSME the collection efficiency is quite stagnant, and the second is other segment. So what are the efforts, we are making to improve the collection trend in these two categories?

 

Ashish Goel:                       So in MSME, what you see here on the slide is built in the month and collected in the month. But there is also a good amount of additional collection, which we do, which is collected in the next month. So overall if you see the collection efficiency including the overdues, it has been maintained at 98.5% throughout the quarter. What you see here in this slide is 88, 87, 88, which is the collection for the month but there is also overdue collection which we do month on month. So this is also a result of stabilized cases in bucket 1 and 2.

 

Deepak Khetan:                  And Manish, if you see the additional collection that also is quite a hefty amount. That's what Ashish is referring to. Also one more thing the collection efficiency 88%- 87% is including the GNPA PAR portfolio that we have and given that MSME current GNPA numbers are high. This number seems to be a little lower. However as he mentioned, the NDA bucket collection is quite good and even from the par SMA 0, SMA 1, SMA 2 and your NPA collections are quite good, which are happening. So if you add up the total collection that will seem to be a very good collection, that is coming in.

 

Manish Ostwal:                  Thank you Deepak and thank you management team for answering my question. Thank you.

 

Deepak Khetan:                  Thank you very much, Manish.

 

Moderator:                         Thank you. The next question comes from the line of Renish from ICICI. Please go ahead.

 

Renish:                               Yes, hi sir and congrats on a good set of numbers. Sir, just two questions. So, one is on the liability side. So, if we refer to the new customer acquisition in the quarter, actually that has gone up from 3,35,000 to 3,41,000. And when we look at the average SA balance, it is that also remained sort of flattish sequentially. And despite that, our SA balance is has sort of contracted by 4%. So what explain this, sir?

 

Deepak Khetan:                  Renish, SA balances, if you see, it's an industry phenomena that the SA balances, CASA is going down for almost all the banks, who have reported their results so far. If you see for Ujjivan, a little longish period, you will actually see that the Casa has grown quite handsomely. So we would say that, this is more or less in line with the industry, a little better off with the industry and with the new facilities that we are providing, new products that we are coming up with and the retail, the brand campaign that we have launched, these balances will improve going forward in the coming quarters.

 

Renish:                               Got it. And secondly, on the ROA side, so you know, so last four quarters, five quarters, given the very low provisioning requirement, plus the strong AUM growth. So now on a steady state basis, once the credit cost normalize, as you know, you guys are highlighting that second half, we'll see a slightly higher credit cost. So on a steady state basis, what kind of a ROA this business can generate?

 

 

Deepak Khetan:                  Renish, on the ROA side, we have mentioned that for this year, we'll definitely see a 3% plus ROA. We maintain that guidance on that. We have mentioned that the ROE for this year will be 22% plus. We maintain that guidance. There might be a little upswing to that depending upon the market condition, but right now, we do not want to change any guidance.

 

Renish:                               Not for this year, I'm saying on a steady state basis, once you know some of the operating parameters normalize, especially credit cost. So in that scenario, does the, let's say, the current business mix should generate a 2.5% ROA on sustainable basis, or how one should look at it?

 

Deepak Khetan:                  Definitely, we can do that and maybe more than that, we can definitely do that.

 

Renish:                               Okay. That's it from side, Deepak. Thank you.

 

Moderator:                         Thank you. The next question comes from the line of Sukriti Jiwarajka from Lamburnum Capital. Please go ahead.

 

Sukriti Jiwarajka:              I just want to follow up a little bit on the asset quality of the MSME book. Like you just mentioned, both the GNP and the PAR numbers are quite high. And the thing is that, they have been quite sticky and quite high for a few quarters now. What is causing the stress, which pockets, which sectors, maybe some light on why these numbers continue to be so high, even the pie numbers, and what is the path to bringing this down?

 

Ashish Goel:                       So there are two, three reasons that I would want to list down. One, our book has not grown, so therefore the percentages are looking high. But if you look at the absolute numbers, the absolute numbers have been stable and moved a little up or down quarter-on-quarter. But the denominator effect has impacted the percentages. In terms of slippages, these slippages have been under control. The NPA number and absolute number has been under control. And our bucket X efficiency has been. leading indicators.

 

In terms of geography, you mentioned that which geographies are causing this. There is a little bit of NPA in West Bengal, which is slightly elevated as compared to the rest of the regions.

 

Sukriti Jiwarajka:              Got it. And a similar question for MFI, if you are seeing any early pockets of you know, early warning signals or any early pockets of stress, because the thing is every MFI is guiding to 30% growth over a very high base and a lot of banks are looking to aggressively get into this space. So as a conservative lender, are there any signals of customer over leverage or something that is coming up in our radar?

 

Ashish Goel:                       One of the advantages we carry is our book is spread across 25 states. So that makes us less vulnerable to geographic stresses. So and we also have a state wide cap. Most of our five bigger states are also capped in the range of 15% and there are three states, which are above 10%, every other state is between 5% to 10%.

 

In terms of high growth states, our market share is in the range of 3% to 4% all across every state. So there is no specific area, where we have any high concentration of the book. In terms of growth, we've been maintaining 0.6% 30 plus MOB. Sorry, 30 plus and 18 MOB book,

 

 

which we've been monitoring for the last 24 months consistently post-COVID. And this has remained steady for us.

 

One more thing that gives us confidence is our non-delinquent book, which is, bucket zero. That has been consistent above 99.8% for the last 18 months. So we've not seen any specific areas in which there are any stresses building up.

 

Sukriti Jiwarajka:              Got it. No geographies. I understand that, you have very well diversified your book and that is not even the question. It is really on a macro level if anything is coming up, whether it affects you or not in pockets, in areas, in geographies?

 

Ashish Goel:                       If there is a change in, there are certain areas, at certain times, which are very topical in nature like the floods or if there is any other natural calamity. Those are the kind of things which do affect us. So, we had a marginal dip for example in certain regions in north. But, those get recovered over the next month or so because these are again 15 day to 20 day phenomena.

 

Sukriti Jiwarajka:              Got it. Okay. Thank you so much for answering my question.

 

Management:                      Thank you, Sukritiji.

 

Moderator:                         Thank you. The next question comes from the line of Pritesh Bum from DAM Capital. Please go ahead.

 

Pritesh Bum:                       Hi, good evening. Just two questions. One is a clarity needed. As a percentage of loans, 43% comes from new loans acquired. Is this a phenomenon that the existing loans are migrating to IL or we are actually, have a rise in terms of new fresh loans?

 

Ashish Goel:                       So both things are happening. Our GL customers are also migrating to IL as well as new customers are also getting added. So we for example said that, we added about 2.6 lakh new customers in this quarter. This is in addition to about 9.6 lakh new customers, we had added in the last full year. The net addition last year was about 6.5 lakh. So yes, new customer acquisition which we opened last year was a strategy and we are also opening new branches. So that also gives a slight increase in our NCA numbers. So it's a combination of all these factors.

 

Pritesh Bum:                       And that is the reason, our ticket size also has gone down, is it?

 

Ashish Goel:                       Yes, last year you may remember about five quarters back, our ticket size had gone up six quarters back because we were doing largely repeat loans and we were very conscious about doing new customer acquisition because we didn't know, what was the impact of COVID and how long it would last. But last year when we started our NCA strategy again, we started seeing as the new customer percentage has gone up, the average ticket size has gone down.

 

Pritesh Bum:                       Sure, and which geography these new customers are coming from? You can give some more colour on that?

 

 

Ashish Goel:                       All geographies, these are across branches. We have added team members across branches and therefore there is no skew in any state.

 

Pritesh Bum:                       Got it. Second question was the off-role employees of collections are going down steadily. At what level will we steady that number and is that the reason, why the other opex quarter-on- quarter was down?

 

Ashish Goel:                       So the way we are looking at it is our cost of collections remains in the range of about 20% with our off-role staff. There are two factors here. One is the entire book, which was affected by COVID is now 700 DPD and above. So obviously then collections will slow down over a period of time and therefore as the collections have slowed down, we have proportionately brought down our team size. The metric that we have followed is about 20% cost of collections. As the numbers keep going down, the team can be suitably downsized.

 

And the second reason is also that our NPA book has not grown. In fact, there has been a steady reduction of accounts in the NPA and the written-off pool. Last year, we reduced more than 1 lakh accounts from NPA plus write-off. So that has also contributed to a reduction in the off-roll team strength.

 

Pritesh Bum:                       And your query on whether that has led to the opex reduction versus Q4?

 

Deepak Khetan:                  No, that is not really the primary reason for reduction versus Q4. Q4 business numbers disbursements were much higher versus Q1. That is the reason why the numbers are lower.

 

Pritesh Bum:                       Sure, that means it was a BAU basically, Business As Usual?

 

Deepak Khetan:                  Yes. It's a business as usual.

 

Pritesh Bum:                       Thank you.

 

Moderator:                         Thank you. The next question comes from the line of Himanshu Taluja from Aditya Birla Mutual Funds. Please go ahead.

 

Himanshu Taluja:               Hi sir, congratulations for a good quarter. Just one question has been from my end, most of the questions have been answered. Sir, last year you have made a, you have strengthened your collection team and as a result, we have seen a very strong bad debt recovery as well. And given you have said, the momentum to continue FY 24, sir, last year, you have made a good good collections bad debt recovery from the early delinquency period.

 

Now given the current NPA pool would be in a more harder buckets, so what sort of recoveries that you think that you can probably achieve in FY ‘24? Anything? And do you need the similar collection workforce in this year as well, which you have probably, which you have added the last year?

 

Deepak Khetan:                  Himanshu, this is something that Mr. Davis touched in his opening remark also that FY ‘24 also bad debt recovery would continue to be very handsome. However, maybe a little lower than what we did in FY ‘23. FY ‘23 we did around INR135 crores odd. This year it would be a